I don't get how not sleeping over at her place and such is a problem. If she gets a boyfriend then her situation is likely to be the same and she will probably just put boundaries up. This will likely really hurt him in the future.

I think the thing is that you make it clear you don't want him to lose her as a friend but you don't see why he has to stay overnight at her place and such.

He wants everything and doesn't want to lose anything. He is being pretty selfish.